San Diego’s long-running power debate got a jolt today as city leaders officially cracked open a new feasibility report on whether to launch a government-run electric utility that could eventually replace San Diego Gas & Electric. Councilmembers gathered to start digging into the Phase II analysis, zeroing in on the potential price tag, risks and day-to-day realities of City Hall taking over local power delivery. Councilmember Stephen Whitburn told a local morning program that a government-owned utility might actually pencil out for San Diego, both financially and operationally.
The Phase II study, prepared by a consultant team led by NewGen Strategies & Solutions, pegs possible acquisition costs at roughly $2.4 billion to $7.6 billion and forecasts long-term savings that could average about $500 per customer per year in later decades, according to KPBS. The analysis models potential annual savings topping $600 million in later years and suggests that money could be steered into lower rates, shoring up aging infrastructure or local programs. Isaiah Glasoe of Public Power San Diego told KPBS the study’s assumptions were conservative yet still pointed to long-term savings.
What the Phase II study covers
City officials say the Phase II report builds on an earlier Phase I study and lays out an inventory of assets the city would need to acquire, estimates for operations and maintenance costs, and refreshed risk and implementation analyses. The document was delivered to councilmembers in a memo from the mayor and outlines several decision points the city would face if it chose to move forward, according to the City of San Diego. The study also assumes San Diego Community Power would remain the commodity supplier while the consultants evaluate both distribution-only and transmission-plus acquisition scenarios.
SDG&E pushes back
San Diego Gas & Electric is not exactly cheering from the sidelines. The utility blasted the report as flawed and said it values its local infrastructure at about $9 billion, arguing the study lowballs key costs tied to physically separating the city’s system from SDG&E’s broader regional grid. Those include building boundary substations, accounting for wildfire liability and full participation in the California Independent System Operator, according to KPBS. The company told the outlet that if valuation methods used by the California Public Utilities Commission were applied, the projected savings could vanish and more financial risk could land on customers.
Political stakes and timeline
Councilmembers kicked off their review at a meeting today, with Whitburn telling FOX5 San Diego that the idea of a city-run utility might be both financially and operationally workable. Even so, city staff and consultants are warning that municipalization would be a long haul, potentially a decade or more, with multiple council votes, regulatory reviews and, in some scenarios, eminent-domain proceedings required before any assets could change hands, a process detailed on the City of San Diego’s public power page.
What to watch next
From here, key signals to watch include whether the Phase II report lands on the agenda for a full council hearing, any formal proposals to fund acquisition planning, and decisions at the California Public Utilities Commission or state level that will guide valuation and compensation for municipalization efforts. Those procedural moves and regulatory rulings will largely decide whether this stays a thought exercise or becomes a real takeover bid. The American Public Power Association has previously noted that early-stage findings like these can justify deeper study while also underscoring the political, operational and financial hurdles that come with trying to build a city-owned utility from the ground up.
